29 Jun My wife and I disagree about when to take Social Security. Help!

Q. My wife and I disagree about when we should take Social Security. We are both 60. I think we should take it at 62 but she thinks only one of us should take it then and the other should let the benefit grow. But what if we choose wrong and the one who lets the benefit grow dies first? won’t we lose out on money that way for the surviving spouse?
— Happily married

A. We’re so glad you’re asking.

When you take Social Security is an important decision.

The earliest date to collect would be at age 62 but there are important considerations before you start, said Jody D’Agostini, a certified financial planner with Equitable Advisors/The Falcon Financial Group in Morristown.

You didn’t say if you’re still working. If you collect and you’re still working, you will be penalized, she said.

“You will forfeit one dollar for every two dollars you earn above $21,240,” she said. After this there is no limit to what you can earn.”

Ideally, it would be best if you waited until you are at least full retirement age which for you both would be age 67, and even better to wait until the maximum monthly benefit at age 70, she said.

You must also consider your personal situation.

Ask yourself about your current income need and whether this can be met through current income or reducing expenses so you can maximize your Social Security benefit, she said.

“The monthly benefit will receive delayed credits which increases 7 to 8% per year until you reach the age of 70,” she said. “You would be entitled to delayed credits. This is a significant boost to your benefit.”

Thereafter, you would receive cost of living increases, but those average 2.7% a year, she said.

Also, your health and family history should be considered. If you are in poor health with limited life expectancy due to health or family history, then perhaps it makes sense to file sooner, she said.

“Social Security is likely the best form of guaranteed income that we have in retirement. It is backed by the U.S. government and has cost of living increases. We cannot outlive it,” she said. “Also, the spouse that has the higher monthly benefit amount should delay claiming for as long as possible; ideally age 70. If that spouse were to predecease the other, they would be entitled to move up to the higher benefit for the balance of their life.”

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This story was originally published on June 29, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.